IMPLEMENTATION LEVEL

National

AFFECTED FLOW

Inflow

ANNOUNCED AS TEMPORARY

No

NON-TRADE-RELATED RATIONALE

No

ELIGIBLE FIRMS

all

JUMBO

No

TARIFF PEAK

No
← back to the state act
Inception date: 30 Sep 2015 | Removal date: open ended
Still in force

Controls on commercial transactions and investment instruments

On 30 September 2015, the Indonesian Ministry for Economic Affairs announced that the country's central bank implemented a number of measures to halt the fall of the Indonesian rupiah (IDR).

The steps included a reduced tax on interest earned from designated foreign currency accounts - set at 20% until now . The eligible accounts contain foreign currency receipts of Indonesian exporters ("Devisa Hasil Ekspor", DHE - Indonesian for "foreign currency earnings from export activities").

The tax relief rewards Indonesia exporters for keeping foreign currency holdings rather than spending them on overseas purchases. An additional incentive is proposed for DHE conversion into the Indonesian rupiah.

In an interview with CNNIndonesia (cf. Sources), the Finance Minister said the tax would drop to 10% if the foreign currency (he explicitly only referred to the American dollar) was held in the Indonesian account for at least 1 month. It would further drop to 7.5 for 3 months and 2.5 for 6 months. If the exporters held their US-Dollar holdings for more than half a year, the tax will be completely dropped.

According to the Ministry, this move should encourage keeping the foreign currency earnings longer in the country.

AFFECTED COUNTRIES

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